Spreadsheet Pros and Cons

Article in progress for CIMA Insight

Following on from the debate at the Glasgow forum, some key issues surrounding spreadsheets have come to the fore that have formed the basis of a series of articles for CIMA Insight. For a taster and an explanation of the issues, read on below…:

The Need to Put the Spotlight on Spreadsheets

In the 1990s, the desk-top computer revolution and liberated management accountants from the constraints of batch driven mainframe processing, enabling the right information to be produced, in the right place, at the right time!

Researchers at the University of Loughborough are discovering that recent developments in the internet, Enterprise Resource Planning Systems (ERP), shared service centres (SSCs) and business process outsource providers (BPOs) are causing organisations to reappraise their management information systems, and the prime suspect in the frame is the humble spreadsheet.

A new focus on internal controls and corporate risk exposure through Sarbanes-Oxely legislation together with the pursuit of lower costs and better service to front-line businesses is now moving up the value chain. The key question is now whether there is a better way of producing management information that leverages the power of the ERP rather than treating it as peripheral system that merely exists to process the transactions?

More generally, many participants were concerned about the cost of expensive people designing, writing and maintaining spreadsheets, especially when someone at a desk nearby might be building an identical model, but maybe in different colours for a different set of managers. As one manager put it, ‘It’s too easy to create cottage industries where everyone is doing the same thing’.